Required Minimum Distributions (RMDs) are mandatory withdrawals from many pre-tax retirement accounts once you reach your required starting age. For most retirees, that age is 73 (for those born between 1951 and 1959), increasing to 75 for those born in 1960 or later.
Because RMDs are generally taxed as ordinary income, they can push you into a higher tax bracket and may also increase Medicare premiums if you do not plan ahead.
Key Takeaways
- Traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer plans (like 401(k)s) typically have RMD rules.
- Roth IRAs have no lifetime RMDs for the original owner, and SECURE 2.0 eliminated lifetime RMDs for Roth accounts in employer plans starting in 2024.
- Proactive withdrawals or Roth conversions in the years before RMDs begin can reduce the size of future forced distributions.
- Adding RMD income on top of other income can increase how much of your Social Security is taxable and can trigger Medicare IRMAA surcharges.
What RMDs are and which accounts they apply to
RMDs are the Internal Revenue Service’s (IRS’s) way of ensuring tax-deferred retirement savings are eventually taxed. If contributions went in pre-tax, or the growth has never been taxed, you must begin taking minimum withdrawals once you reach the required age.
Accounts commonly subject to RMDs
RMD rules generally apply to:
- Traditional IRAs
- SEP IRAs
- SIMPLE IRAs
- Many employer retirement plans, such as 401(k)s
Important nuance: Some workplace plans allow you to delay RMDs if you are still working (often called the “still working” exception). Special rules and exceptions apply, and certain owners may not qualify.
How RMDs are calculated in plain English
In most cases, your annual RMD depends on two factors:
- Your account balance on December 31 of the prior year
- A life expectancy factor from IRS tables (often the Uniform Lifetime Table)
For example, the Uniform Lifetime Table factor at age 73 is 26.5, so a rough estimate is prior year-end balance divided by 26.5.
Exact calculations can differ, especially if a spouse is the sole beneficiary and significantly younger.
Accounts without lifetime RMDs
Roth IRAs
Roth IRAs do not require RMDs during the original owner’s lifetime, which can provide long-term tax flexibility.
Roth 401(k)s and other Roth employer-plan accounts
SECURE 2.0 eliminated lifetime RMDs for Roth employer-plan accounts beginning in 2024 for the original owner.
Why RMDs can increase taxes and trigger domino effects
An RMD is a forced income event. It does not replace other income but stacks on top of it. Here are the key impacts retirees often notice once RMDs begin.
1) Higher tax brackets
Because RMDs are generally taxable, they can raise your tax rate and reduce take-home income, especially when combined with pensions or other taxable income.
2) More Social Security becomes taxable
Many retirees are surprised by this. Social Security taxation depends on your overall income picture. When RMDs raise taxable income, they can increase the portion of Social Security that becomes taxable.
3) Higher Medicare costs (IRMAA)
Medicare premiums are income-based. For 2026, the first IRMAA threshold applies when 2024 income exceeds $109,000 (single) or $218,000 (joint), using a two-year lookback.
Ways retirees often plan ahead
Roth conversions, when appropriate
A Roth conversion moves money from a traditional IRA to a Roth IRA. You typically pay taxes in the year of the conversion, but future Roth growth and qualified withdrawals can become tax-advantaged.
This strategy is often considered in the window after retirement but before RMDs begin, when taxable income may be lower. Because conversion amounts can affect tax brackets and Medicare IRMAA, it usually works best as part of a coordinated, year-by-year plan.
Qualified Charitable Distributions (QCDs)
If you are age 70½ or older, you may be able to send money directly from an IRA to a qualified charity using a QCD. When done correctly, the distribution can count toward your RMD and is generally excluded from taxable income.
What happens if you miss your RMD?
Missing an RMD can be costly. The IRS may assess an excise tax of 25% of the amount not withdrawn, reduced to 10% if corrected within two years. Correcting the error typically involved filing Form 5329.
FAQs
They generally begin at the required age. Many retirees start at 73, with the starting age increasing to 75 for those born in 1960 or later when they reach eligibility.
Traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer plans generally have RMD rules. Roth IRAs do not have lifetime RMDs for the original owner.
Yes. Higher income can trigger IRMAA for Part B and Part D, and Medicare generally uses a two-year lookback.
Want to avoid RMD surprises before they hit?
RMD planning works best years before the first required withdrawal. If you want assistance mapping a tax-aware strategy that coordinates Social Security timing, Roth planning, and future RMD impacts, review your retirement income strategy with a CFP® professional at Bauman Wealth Advisors. We’ll help turn the rules into a clear, year-by-year plan you can follow without doubt.
